Trade payables days

Trade payables days is the average number of days a business takes to pay its suppliers, calculated as accounts payable divided by daily cost of goods sold; a longer figure eases short-term cash pressure.

ByHoang TruongUpdated July 2, 2026

FrameworkRatio analysis

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Trade payables days measures how long a business takes to pay its suppliers: accounts payable divided by cost of goods sold, times days in the period. With €800,000 in payables and €4,000,000 of cost of goods sold, (800,000 ÷ 4,000,000) × 365 = 73 days of supplier financing.

Where it fits

SubjectFinancial AccountingCoreTopicWorking Capital & Trade AccountsCoreTopicFinancial Statement Analysis & RatiosCore

The formula

LaTeX

\text{Trade payables days} = \dfrac{\text{Accounts payable}}{\text{Cost of goods sold}} \times \text{Days in period}

Variables

$A P$: Accounts payable (trade creditors at period end) (€)
$C O GS$: Cost of goods sold (or cost of purchases where more appropriate) (€)
$D$: Days in period (typically 365 for an annual calculation) (days)

Also called the creditor payment period; a longer figure eases short-term cash pressure but must not breach agreed supplier terms.

Check yourself

PracticeCORE

A company's accounts payable balance is €500,000 and its annual cost of goods sold is €3,650,000. What is trade payables days, and which statement best describes extending this figure?

Select an answer to check your understanding.